Just What We Need -- More Oil -- December 30, 2014

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Yes, .... oil down to $30.

Just what we need, more oil.

First, from Reuters at Rigzone:

BP has started producing oil from its Kinnoull field in the central North Sea bringing on stream a new field that feeds into BP's existing Andrew platform off the coast of Scotland.

Oil and gas produced at Andrew and Kinnoull is expected to peak at over 50,000 barrels of oil equivalent per day and will be transported to the mainland via the Forties oil pipeline and CATS gas pipeline.

The contribution from Kinnoull should help to offset some of the decline in Forties production from the Nexen-operated Buzzard field. Forties is the biggest of the four crude streams that underpin the price of dated Brent and Brent futures so fluctuations in Forties supply can impact global oil prices.

Traders said that Buzzard is becoming well-constrained and is currently pumping at about 180,000 barrels per day (bpd), down from its previous maximum operating capacity of about 205,000 bpd. The latest updates on the Forties Pipeline System website indicate a smaller contribution to the Forties blend from Buzzard in the first quarter of 2015, dropping to around 30 percent in April from 43 percent in the week Dec. 22-28.

BP said it was investing, together with project partners, more than 7 billion pounds ($10.9 billion) in the North Sea over the next five years and that it had won licences in 7 new North Sea blocks in the government's latest allocation round.

And even more oil, from Rigzone:

BG Group announced Tuesday that its partner Petróleo Brasileiro S.A. (Petrobras), as the operator of block BM-S-11 in the pre-salt Santos Basin, has submitted the Declarations of Commerciality (DoC) to the Brazilian National Agency of Petroleum, Natural Gas and Biofuels (ANP) for three separate oil and gas accumulations in the Iara area, offshore Brazil.

As part of the DoC, the consortium has suggested that the new fields be designated Berbigão, Sururu and Atapú West.

The Iara area is located approximately 155 miles (250 kilometers) off the coast of Rio de Janeiro, in water depths of around 7,448 feet (2,270 meters). All fields contain good quality oil, of approximately 24 to 30 degrees API. The DoC submission follows an exploration and appraisal program which began in 2008 and consisted of acquiring 3D seismic data, drilling seven wells as well as performing an extended well test. The encouraging results from this program continue to reinforce BG Group’s view of gross recoverable volumes in the BM-S-11 Iara area. The DoC notification to the ANP includes the operator’s estimates of total recoverable volumes of the three accumulations.

Peak oil? What peak oil? Drill, baby, drill -- this would make that old guy on the Kudlow Report happy. 

Seriously, this is very interesting. It seems back in 2008 or thereabouts, the oil companies were investing a lot of CAPEX into deep-sea drilling. Now, just as shale oil hits its stride, deep-sea oil projects are coming on line. Let's hope they keep having problems in Kashagan. Can I say that without anyone getting angry with me?

By the way, there are winners and losers in all of this. Also from Rigzone:

The slump in international oil prices and increased domestic output will reduce Argentina's energy trade deficit by 16 percent next year to $5.6 billion, the government said on Tuesday, helping to ease strains on the balance of payments. Argentina is grappling with pressure on its foreign currency reserves after being largely shut out from global debt markets for more than a decade and with tight trade and currency controls stifling investment and stunting exports. 

Maybe the slump in the price of oil will also help Greece. LOL.